Waste Conversion v. Midstate Rec.

Full title: WASTE CONVERSION TECHNOLOGIES, INC. v. MIDSTATE RECOVERY, LLC ET AL

Court: Connecticut Superior Court Judicial District of Ansonia-Milford at Milford

Date published: Dec 3, 2008

2008 Ct. Sup. 19121 (Conn. Super. Ct. 2008)

Opinion

No. AAN CV04 4000948

December 3, 2008

MEMORANDUM OF DECISION

BRUCE L. LEVIN, Judge of the Superior Court.

The defendants Midstate Recovery, LLC (Midstate), Regus Industries, LLC (Regus) and Newman, LLC (Newman) move for summary judgment on the three-count complaint of the plaintiff Waste Conversion Technologies, Inc. (WCT). The three-count complaint alleges causes of action for tortious interference with contractual relations, tortious interference with business relations and violation of the Connecticut Unfair Trade Practices Act (CUTPA).

Pleadings

In its complaint, the plaintiff alleges the following. The plaintiff owns and operates a construction and demolition debris (CD) "transfer station" in Milford, Connecticut.¹ The plaintiff receives a fee to receive CD. It then separates recyclable materials from the CD and loads the CD onto railcars. Because its permit to operate a solid waste facility limits the amount of waste it can keep on its premises, the plaintiff's business depends on its ability to move waste materials efficiently from its facility to a landfill. This it does by rail. The plaintiff owns the railcars it uses. It is imperative that its railcars are promptly returned after they are unloaded at a landfill so that they can be refilled. If this is not done, the plaintiff must reduce its CD intake at its transfer station or shut down completely.

1 A transfer station is defined by statute as "any location or structure, whether located on land or water, where more than ten cubic yards of solid waste, generated elsewhere, may be stored for transfer or transferred from transportation units and placed in other transportation units for movement to another location, whether or not such waste is stored at the location prior to transfer." General Statutes §§ 22a-260(12), 22a-207(10).

On December 1, 1999, the plaintiff entered into a five-year contract with Warren Recycling, Inc. (WRI), an Ohio corporation that owns and operates a CD landfill in Warren, Ohio. Pursuant to that contract, WRI agreed to accept and unload the plaintiff's CD delivered to it by railcar and dispose of it in WRI's landfill at a specified price per railcar. WRI agreed to unload the railcars within seventy-two hours of their arrival at its landfill. It also agreed not to enter into a similar agreement with any other CD transfer station within a fifty-mile radius of the plaintiff

The plaintiff alleges that beginning in 2002, WRI failed to timely unload the plaintiff's railcars in accordance with the contract, resulting in a significant delay in the return of railcars to the plaintiff. The plaintiff further alleges that on March 27, 2002, defendant Regus, an affiliate of defendant Midstate, entered into a written contract with WRI to unload and dispose of Midstate's CD debris at WRI. Midstate is located within a fifty-mile radius of the plaintiff and is a direct competitor of the plaintiff. The plaintiff alleges that the defendants² were aware of the terms and conditions of the plaintiff's contract with WRI — including the prohibition against WRI entering into a similar agreement with another CD transfer station within a fifty-mile radius of the plaintiff — by virtue of prior dealings between WRI and Gordon Reger, a member of the board of managers of Regus.

2 Regus and Midstate are affiliates, and Newman manages the two operations.

In the first count, the plaintiff alleges that the defendants induced WRI to breach its contract with the plaintiff by unloading Midstate's railcars before unloading the plaintiff's railcars, causing WRI to return the plaintiff's railcars after the seventy-two hours period prescribed in the plaintiff's contract with WRI. The plaintiff claims that the defendants engaged WRI's services knowing that such an engagement would cause WRI to breach its contract with the plaintiff. The plaintiff further alleges that the defendants engaged in this conduct with malice and with the intent to impair or destroy the plaintiff's contractual relationship with WRI and to damage the plaintiff economically. The plaintiff claims that as a result of the defendants' conduct, it suffered lost revenue because it was forced to accept less CD, process less recyclables and close its facility. It further claims that it incurred increased costs because it had to find alternative means of disposing of CD, reroute rail cars, rent equipment and pay higher disposal fees. It also claims a loss of good will among its customers.

In the second count, the plaintiff asserts a claim for tortious interference with business relations against the defendants. The second count incorporates the allegations of the first count and further asserts that when the defendants engaged WRI to recycle and dispose of waste for Midstate, they were aware of the competitive nature of the plaintiff's business and its reliance on those business relationships with persons interested in disposing of CD material. The plaintiff alleges that the defendants were neither justified nor privileged to engage in the aforementioned conduct, which resulted in the impairment of the plaintiff's relationships with third parties. The plaintiff claims in the second count that the defendants "intended to impair or destroy plaintiff's contractual relationship with WRI, thereby dashing plaintiff's expectancy of economic gain. Defendants engaged in this conduct with malice toward the plaintiff and a desire to injure plaintiff economically."

The third count incorporates the allegations of the second count and alleges that the defendants' conduct violates CUTPA.

The defendants filed an answer denying any wrongdoing and interposing several special defenses in which they asserted, inter alia, that the plaintiff's contract with WRI was against public policy and unenforceable under the Connecticut Antitrust Act and the Sherman Antitrust Act. The defendants do not raise the matters alleged in their special defenses in their motion for summary judgment.

The defendants have moved for summary judgment on all three counts; the plaintiff opposes the motion. Both the motion and opposition are supported by copies of deposition transcripts and other documents.

3 ³ Virtually all of the documents submitted by the parties in support of or in opposition to the motion consist of deposition transcripts which are not certified, as required by Practice Book § 17-45, as well as documents and even raw data that are not authenticated. Ordinarily, the court may not consider such materials on a motion for summary judgment. New Haven v. Pantani, 89 Conn.App. 675, 678-79, 874 A.2d 849 (2005). Since, however, both sides are equally culpable in this respect, both sides are represented by competent counsel, and neither side objects, except as otherwise discussed herein, "[w]e shall therefore consider the case as it [is] presented by the parties . . . overlooking the foregoing procedural shortcomings . . ." Paul v. New Haven, 48 Conn.App. 385, 388 n. 2, 710 A.2d 798 (1998). Accordingly, the court has examined and considers all of the materials submitted in support of and in opposition to the motion. See Barlow v. Palmer, 96 Conn.App. 88, 92, 898 A.2d 835 (2006); Crowley v. Dudek, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 05 4004360 (November 30, 2007, Levin, J.); Grant v. Yale University, Superior Court, judicial district of New Haven, Docket No. CV 99 0430454 (March 27, 2003, Licari, J.).

"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." (Internal quotation marks omitted.) Bellemare v. Wachovia Mortgage Corp., 284 Conn. 193, 198, 931 A.2d 916 (2007). "The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the non-moving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 11, 938 A.2d 576 (2008).

"A material fact is a fact that will make a difference in the result of the case." (Internal quotation marks omitted.) McKinney v. Chapman, 103 Conn.App. 446, 450, 929 A.2d 355, cert. denied, 284 Conn. 928, 934 A.2d 243 (2007). "[T]ypically [d]emonstrating a genuine issue requires a showing of evidentiary facts or substantial evidence outside the pleadings from which material facts alleged in the pleadings can be warrantably inferred . . . Moreover, [t]o establish the existence of a material fact, it is not enough for the party opposing summary judgment merely to assert the existence of a disputed issue . . . Such assertions are insufficient regardless of whether they are contained in a complaint or a brief . . . Further, unadmitted allegations in the pleadings do not constitute proof of the existence of a genuine issue as to any material fact." (Internal quotation marks omitted.) Id., 451.

Taken in a light most favorable to the plaintiff as the non-moving party, the parties' documentary submissions establish that there is no genuine issue of material fact as to the following. The plaintiff operates a transfer station in Milford, Connecticut. The plaintiff's business consisted of accepting CD for a fee, extracting recyclables from that material, and loading the remaining waste into railcars for disposal at a landfill. The plaintiff's business depended on the constant movement of its railcars to a landfill once loaded and prompt return once emptied.

On November 19, 1999, the plaintiff entered into a written contract with WRI, which operated a landfill in Warren, Ohio. WRI is not a party to this action. Article IV of the agreement provided that the plaintiff "agrees to deliver to WRI CD material by rail and further agrees that all CD material it disposes by rail shall be deliverable to WRI. In order to ensure a continuous flow of CD material WRI agrees not to enter into a similar agreement with any other CD transfer station within a 50 mile radius of [the plaintiff] during the term of this agreement." The term of the agreement was five years. Article VI provided in pertinent part: "WRI shall unload all rail cars within seventy-two (72) hours of arrival at WRI's landfill." The agreement provided that the plaintiff would pay WRI $800 per rail car unloaded with annual prices increases. The agreement further provided that it was to be governed by Ohio law.

Regus was formerly known as New England Waste, LLC (NEW). Gordon Reger is the manager and chief executive officer of Regus. Michael Gustin is its chief operating officer. In 2000, NEW was looking for landfills that would be able to handle the waste generated by its existing and planned facilities. On March 15, 2000, Gordon Reger, as president of NEW, signed a letter of intent to acquire WRI. NEW then engaged in a due diligence investigation during which it learned that WRI had three railcar customers: the plaintiff, Bill Frank Trucking and Metro Environmental.⁴ At that time, WRI's railcar business comprised approximately 80 percent of its revenue and was projected to grow to over 89 percent of its revenue by May 31, 2001. As part of its due diligence investigation, NEW requested all contracts to which WRI was a party. NEW learned that Bill Frank Trucking was by far WRI's biggest customer.

4 Reger had also discussed the acquisition of WRI with WRI's president, Anthony DiCenso, in 1998.

On April 13, 2000, NEW informed WRI that it was "not satisfied with the results of its due diligence investigation" and terminated its letter of intent. The reason for this decision was that NEW had learned that Bill Frank's contract with WRI enabled Bill Frank to dispose of 1,000 tons of waste per day at WRI's landfill. NEW was concerned that this would not leave enough capacity in the landfill to handle the loads it hoped to generate. Nonetheless, in 2000 and 2001, Reger continued discussions about potentially acquiring WRI.

On February 19, 2002, Midstate began operating a transfer station in Portland, Connecticut. Its facility was within fifty miles of the plaintiff's facility. At this time, the president of WRI was Anthony DiCenso, III. DiCenso and Reger had known each other since at least 1997 and talked regularly.

In mid-March 2002, Reger and Andrew Orient of NEW had a luncheon meeting with DiCenso in Windsor Locks, Connecticut, to discuss the possibility of Midstate sending its CD to WRI.⁵ The meeting was held at DiCenso's request. According to Orient, DiCenso "was concerned because he did have a backlog of cars. He felt that he could work through that. And I think Gordon [Reger] was telling him that the amount of cars that Midstate was going to ship was relatively few in the immediate future, because we were just starting a ramp-up of, you know, the facility opening."⁶ The parties haggled over price. They did not discuss the plaintiff at their meeting.

5 Orient identified the meeting's location as the "Sheraton Inn at the Hartford airport." The court takes judicial notice that the airport is actually in Windsor Locks, Connecticut.

6 The plaintiff claims that this meeting was held on March 15, 2002 in Hartford. The transcript references cited by the plaintiff do not support this. However, the exact time and place of the meeting are not material, and the defendants do not dispute the time and place of the meeting.

On March 27, 2002, NEW and WRI entered into a contract in which WRI agreed to dispose of Midstate's CD at its landfill. Specifically, WRI agreed to the "[u]nloading and disposal of construction and demolition material at Warren Recycling, Inc. delivered by CSX" Corp. (CSX), a major North American railroad company, at a price of "$850 per car (6,000 yd. car)." Both WRI's contract with the plaintiff and its contract with NEW provided that a railcar could contain no more than 100 tons of CD material.

Also around March 2002, Reger and Gustin, as representatives of NEW, met with Richard Wills and Alfred Rattenni, representatives of the plaintiff, at the plaintiff's Milford facility to discuss a possible acquisition of the plaintiff. Rattenni knew Gustin from prior dealings in the waste industry. Gustin told Rattenni that Reger was trying to build a large waste company, that he had substantial funding available, and that he was making Gustin a partner in the business. At the time of the meeting, Wills and Rattenni did not know that Reger and Gustin were also operators of Midstate, nor did Reger or Gustin volunteer this information. Reger and Gustin were not only aware of the plaintiff's contract with WRI but also its terms, including the fifty-mile radius provision. Gustin considered that provision "at best, it was a problem." Thus Midstate transported rail cars to WRI loaded with CD material even though it had knowledge of the fifty-mile radius provision in the plaintiff's contract with WRI.

In April 2002, Regus renewed discussions not only to purchase WRI's landfill but also to acquire Bill Frank Trucking's rail business. In September 2002, Regus, acting through a new Regus entity, Warren Ohio Waste, LLC, entered into a contract with WRI and TG Enterprises to acquire the assets of WRI, including its landfill. In September 2002, NEW entered into an agreement with Bill Frank Trucking to acquire its assets. Each contract was conditioned on the consummation of the other

Beginning in early 2002, the plaintiff began experiencing significant delays in the return of its railcars from WRI. This resulted in a loss of revenue to the plaintiff and increased costs. The plaintiff claims that it sustained over $4 million in damages. Between March 2002 and September 2002, WRI unloaded 288 of Midstate's railcars. This period coincides with the period in which Regus was in discussions with WRI and Bill Frank Trucking concerning the acquisition of their respective businesses. Additional facts will be set forth as necessary

I

The first count of the complaint asserts a claim for tortious interference with contractual relations. The defendants argue that they are entitled to summary judgment on the first count because (1) the defendants did not know the terms of the WCT-WRI agreement in March 2002 and did not become aware of those terms until the fall of 2002; (2) Midstate did not request, demand or receive preferential treatment by WRI in the unloading of its railcars; (3) WRI in fact complied with its contractual obligation to unload the plaintiff's railcars within seventy-two hours after the arrival of the railcars at the landfill and therefore WRI was not in breach and the defendants therefore did not induce a breach of contract nor interfere with WRI's performance of its contract obligations; (4) any interference by the defendants with the agreement between the plaintiff and WRI was not tortious; and (5) the plaintiff sustained no damages as a result of any alleged tortious interference with the plaintiff's agreement with WRI.

The elements of a cause of action for intentional interference with contractual relations are: "(1) the existence of a contractual or beneficial relationship; (2) the defendant's knowledge of that relationship; (3) the defendant's intent to interfere with the relationship; (4) that the interference was tortious; and (5) a loss suffered by the plaintiff that was caused by the defendant's tortious conduct." Rioux v. Barry, 283 Conn. 338, 351, 927 A.2d 304 (2007). The Connecticut Supreme Court has "made it clear that not every act that disturbs a contract or business expectancy is actionable." Blake v. Levy, 191 Conn. 257, 260, 464 A.2d 52 (1983).

The defendants do not dispute that there was a contractual relationship between the plaintiff and WRI. In their brief, the defendants first argue that they did not know of the existence of the plaintiff's contract with WRI or its terms until after the plaintiff had terminated its relationship with WRI. In their reply brief, however, the "[d]efendants concede that on this record, a question of fact has been raised as to whether one or more of them knew of the existence and terms of the contract between plaintiff and . . . [WRI] at or around the time defendant Midstate began shipping its rail cars to WRI's landfill." Accordingly, the defendants' claim to the contrary is deemed abandoned. Anthony Julian Railroad Construction Co. v. Mary Ellen Drive Associates, 50 Conn.App. 289, 294, 717 A.2d 294 (1998); Bria v. St. Joseph's Hospital, 153 Conn. 626, 628, 220 A.2d 29 (1966).

A

The defendants argue that there is no genuine issue of material fact that they did not intend to interfere with the plaintiff's relationship with WRI. The defendants cite the deposition testimony of Reger that the purpose of the March 27, 2002 agreement between NEW and WRI "was to have construction and demolition waste unloaded and disposed of at the Warren Recycling landfill." The defendants argue that "[t]here is absolutely no proof whatsoever that defendants `intended to destroy plaintiff's contractual relationship with WRI, thereby dashing plaintiff's expectancy of economic gain' or that defendants `engaged in this conduct with malice toward the plaintiff and a desire to injure plaintiff economically,'" as argued by the plaintiff. To the contrary, the defendants argue, based on the above-quoted deposition excerpt, there is no genuine issue of material fact that they "neither harbored an improper motive nor employed improper means in entering into the agreement with WRI." The court is not persuaded.

Preliminarily, the court notes that the plaintiff argues that issues of motive and intent are inappropriate for summary judgment determination. Courts have indeed held "that summary judgment is ordinarily inappropriate where an individual's intent and state of mind are implicated . . . The summary judgment rule would be rendered sterile, however, if the mere incantation of intent or state of mind would operate as a talisman to defeat an otherwise valid motion . . . [E]ven with respect to questions of motive, intent and good faith, the party opposing summary judgment must present a factual predicate for his argument in order to raise a genuine issue of fact." (Internal quotation marks omitted.) Gagnon v. Housatonic Valley Tourism District Commission, 92 Conn.App. 835, 842, 888 A.2d 104 (2006).

With respect to the action of tortious interference with contractual relations, the Connecticut appellate courts have adopted the rules of the Restatement (Second) of Torts; Blake v. Levy, supra, 191 Conn. 261; American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 90-91, 920 A.2d 357, cert. denied, 284 Conn. 901, 931 A.2d 261 (2007); Golembeski v. Metichewan Grange No. 190, 20 Conn.App. 699, 702, 569 A.2d 1157, cert. denied, 214 Conn. 809, 573 A.2d 320 (1990); including § 766 of the Restatement (Second) of Torts ("Intentional Interference with Performance of Contract by Third Person"). ⁷Daley v. Aetna Life Casualty Co., 249 Conn. 766, 806, 734 A.2d 112 (1999); Suffield Development Associates L.P. v. National Loan Investors, 64 Conn.App. 192, 204-05, 779 A.2d 822 (2001), rev'd in part on other grounds, 260 Conn. 766, 802 A.2d 44 (2002); Biro v. Hirsch, 62 Conn.App. 11, 21, 771 A.2d 129, cert. denied, 256 Conn. 908, 772 A.2d 601 (2001); Holler v. Buckley Broadcasting Corp., 47 Conn.App. 764, 769, 706 A.2d 1379 (1998); Selby v. Pelletier, 1 Conn.App. 320, 322, 472 A.2d 1285 (1984). Comment (j) to § 766 the Restatement (Second) of Torts states: "The rule stated in this Section is applicable if the actor acts for the primary purpose of interfering with the performance of the contract, and also if he desires to interfere, even though he acts for some other purpose in addition. The rule is broader, however, in its application than to cases in which the defendant has acted with this purpose or desire. It applies also to intentional interference, as that term is defined in § 8A, ⁸ in which the actor does not act for the purpose of interfering with the contract or desire it but knows that the interference is certain or substantially certain to occur as a result of his action. The rule applies, in other words, to an interference that is incidental to the actor's independent purpose and desire but known to him to be a necessary consequence of his action.

7 4 Restatement (Second), Torts § 766 (1979) provides: "INTENTIONAL INTERFERENCE WITH PERFORMANCE OF CONTRACT BY THIRD PERSON. One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract."

8 Section 8A of the Restatement (Second) of Torts provides in relevant part: "The word `intent' is used . . . to denote that the actor desires to cause consequences of his act, or that he believes that the consequences are substantially certain to result from it." 1 Restatement (Second), supra, § 8A. Comment (b) to that section provides in relevant part: "If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the result . . ." 1 Restatement (Second), supra, § 8A, comment (b). Thus, the Connecticut Supreme Court has stated that "[i]n defining intent, we have stated that `intent refers to the consequences of an act . . . [and] denote[s] that the actor desires to cause [the] consequences of his act, or that he believes that the consequences are substantially certain to follow from it. 1 Restatement (Second), Torts § 8A (1965).'" (Emphasis in original.) Suarez v. Dickmont Plastics Corp., 242 Conn. 255, 279, 698 A.2d 838 (1997).

"The fact that this interference with the other's contract was not desired and was purely incidental in character is, however, a factor to be considered in determining whether the interference is improper. If the actor is not acting criminally nor with fraud or violence or other means wrongful in themselves but is endeavoring to advance some interest of his own, the fact that he is aware that he will cause interference with the plaintiff's contract may be regarded as such a minor and incidental consequence and so far removed from the defendant's objective that as against the plaintiff the interference may be found to be not improper." 4 Restatement (Second), supra, § 766, comment (j).

Thus, a finding that the defendants' primary purpose in contracting with WRI was not to interfere with the plaintiff's contract with WRI, nor that they did not desire to do so, is not dispositive if the defendants knew that the interference was substantially certain to occur as a result of their contract with WRI.

Discussing the mid-March 2002 meeting he and Reger had with DiCenso in the Hartford area, Orient testified in his deposition that DiCenso "was concerned because he did have a backlog of cars. He felt that he could work through that. And I think Gordon [Reger] was telling him that the amount of cars that Midstate was going to ship was relatively few in the immediate future, because we were just starting a ramp-up, you know, the facility opening.

"And we didn't — we didn't even have enough cars, if I recollect right. So it was more — I think that Gordon was downplaying, saying, you know, we're going to ship you onesie/twosies. And this should all work out. And Anthony said, yeah. That's probably true. I can get through my backlog, but I still need cash." Midstate subsequently sent 850 cars to WRI between March and September 2002.

In light of this evidence, the court finds that there are genuine issues of fact as to whether (1) the defendants knew of the plaintiff's contract with WRI, and its terms, during the March to September 2002 period, (2) the defendants knew that WRI had a backlog of cars in mid-March 2002, and (3) that Reger told DiCenso that Midstate would only be sending a small number of railcars to the landfill. In light of the undisputed fact that Midstate subsequently sent 850 cars to WRI between March and September, the court finds that there is a genuine issue of material fact as to whether the defendants knew that their March 2002 contract with WRI was substantially certain to cause interference with the plaintiff's contract with WRI.

B

Next, the defendants argue that their conduct in contracting with WRI was not tortious. For a plaintiff to successfully maintain an action for intentional interference with contractual relations it "must prove that the defendant's conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation . . . or that the defendant acted maliciously." (Internal quotation marks omitted.) Daley v. Aetna Life Casualty Co., supra, 249 Conn. 805. "In the context of a tortious interference claim, the term malice is meant not in the sense of ill will, but intentional interference without justification." (Internal quotation marks omitted.) American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 90-91. "[A] claim is made out [only] when interference resulting in injury to another is wrongful by some measure beyond the fact of the interference itself." (Internal quotation marks omitted.) Id., 90. "Stated simply, to substantiate a claim of tortious interference with a business expectancy, there must be evidence that the interference resulted from the defendant's commission of a tort." Golembeski v. Metichewan Grange No. 190, supra, 20 Conn.App. 703, citing Blake v. Levy, supra, 191 Conn. 261. The means by which such interference may be accomplished "encompasses a broad range of behavior." American Diamond Exchange, Inc. v. Alpert, supra, 101 Conn.App. 91.

The means which the plaintiff claims the defendants used to interfere with its contractual relations was (1) having Midstate contract with WRI for the disposal of CD, and (2) insisting on preferential treatment — namely, that Midstate's cars be serviced by WRI out of order and before the plaintiff's railcars. The defendants argue that they did not interfere with the plaintiff's contract with WRI, tortiously or otherwise. Their argument here is twofold. First, the defendants contend that they never requested nor received a preference in service from WRI. Second, they argue that the plaintiff received the service for which it bargained with WRI, that is, contrary to the plaintiff's claim, WRI never breached its contract with the plaintiff. The plaintiff responds that the testimony on which the defendants rely for their argument that they never requested nor received preferential treatment was self-serving; that a letter from WRI's counsel in June 2002 shows that contrary to the defendants' claims, WRI was able to give certain cars preferential treatment; that the plaintiff's expert opines that during the March to September 2002 period, Midstate and Bill Frank Trucking (whom the defendants were negotiating to acquire) received better service from WRI than the plaintiff, and that the very fact that the defendants contracted with WRI knowing that doing so violated WRI's contract with the plaintiff and at a time when they knew that WRI was already having problems servicing its customers constitutes tortious interference.

In Reger's deposition, the following exchange occurred between him and the plaintiff's attorney under questioning from the plaintiff's attorney:

Q. Now, you said earlier that in the beginning you had problems with the turnaround time for Midstate rail cars at the Warren Recycling landfill.

A. Right.

Q. What would you expect to be — what is an acceptable turnaround time for a Midstate Recovery rail car?

A. We were led to believe that the car would be back in two weeks from the day we shipped them.

Q. So round trip of two weeks?

A. Correct.

Q. And how long was it taking, do you remember, at that period of time of March and April of 2002?

A. I don't remember exactly how long. But I do remember they loaded the first group of rail cars that the company had leased — one of the companies had leased. I don't know which one loaded the first group of cars. They sent the cars to Warren. And we waited a tremendous amount of time and we didn't get any. We actually had to start trucking them and shutting the customers off because we weren't getting the empty cars back, which is why I got involved. I went down to Warren to find out what was going on and realized his operation was a disaster and he wasn't unloading cars.

Q. Did you — were you aware of whether or not other rail car customers were having similar problems?

A. At that time, I don't know if I was aware of it. I was focused on my problems, not anybody else's.

***

Q. Did you ask for a faster turnaround time from Warren Recycling?

A. I asked them to unload our cars as soon as they could to get them back to us, yes.

***

Q. Did you ask Warren Recycling to take your cars ahead of Bill Frank?

A. No. I just asked them to unload my cars and send them back.

***

Q. Did you ask Anthony [DiCenso]or anyone at Warren Recycling to take Midstate cars faster than other rail cars from other companies?

A. I don't believe I asked him that. I don't remember asking them that. I told them to get my cars unloaded and get them back to me.

In his deposition in this matter, taken on May 25, 2007, DiCenso, under questioning from the plaintiff's attorney, testified as follows:

Q. Okay. Did Warren Recycling ever give Midstate preferential treatment in the unloading of railcars?

A. You have to be more specific.

Q. Did Warren Recycling ever unload Midstate's railcars before the railcars of Bill Frank or of Waste Conversion if there were cars sitting at the siding?

A. That's — no. The answer is no.

Q. Did —

A. It's not a physical possibility on our, on us, as being the unloading entity, the landfill. There would be — it wouldn't be possible to give anybody preferential treatment in that regard.

Q. Okay. Did, did Warren Recycling ever give CSX any specific instructions or directions to deliver Midstate cars to the landfill?

A. The answer is no. But it wouldn't matter if we did or we didn't.

Q. Why is that?

A. Because the railroad would always bring us whatever block of cars, from my recollection, that they wanted to. And the, the protocol was to be that the cars that had been sitting there in the serving yard the longest, by generating — you know, the ones that were on the clock the longest for demurrage, supposed to be the ones that came out to the, shipped to the landfill from the serving yard, the oldest ones were supposed to be brought over.

***

Q. Okay. Did WRI unload Waste Conversion's railcars within 72 hours of their arrival at WRI's landfill?

A. I believe so, that we did.

The plaintiff argues that the foregoing testimony is self-serving. Summary judgment may not be based on or opposed by inadmissible evidence or self-serving, unsubstantiated speculation; 2830 Whitney Avenue Corp. v. Heritage Canal Development Associates, Inc., 33 Conn.App. 563, 568, 636 A.2d 1377 (1994); or conclusory statements or denials. Gupta v. New Britain General Hospital, 239 Conn. 574, 583, 687 A.2d 111 (1996); Gambardella v. Kaoud, 38 Conn.App. 355, 359-60, 660 A.2d 877 (1995). The evidence submitted by the defendants is not of this ilk. With respect to the evidence given by Reger, even "a party's own affidavit, containing relevant information of which he has first-hand knowledge, may be self-serving, but it is nonetheless competent to support or defeat summary judgment." (Internal quotation marks omitted.) Velazquez-Garcia v. Horizon Lines of Puerto Rico, Inc., 473 F.3d 11, 18 (1st Cir. 2007). Moreover, Reger's evidence is not in ex parte affidavit form but by way of deposition, and on questioning by the plaintiff's attorney. Reger's testimony may not be dismissed as self-serving.

The plaintiff claims that DiCenso's testimony is also self-serving. DiCenso had at one time borrowed money from Reger that Reger's father told him he did not have to repay. Neither this nor the fact that the plaintiff had sued WRI in a lawsuit that was not pending at the time of DiCenso's deposition testimony, quoted supra, permits the court to disregard DiCenso's testimony in determining whether the defendants have borne their burden of persuasion on their motion nor is it sufficient to carry the plaintiff's burden on that motion. Cf. Watkins v. Verland Foundation, Inc., United States District Court, Docket No. 07-0592 (W.D.Pa. August 5, 2008).⁹ Moreover, "self-serving testimony may be utilized by a party at summary judgment." Waldron v. SL Industries, Inc., 56 F.3d 491, 501 (3rd Cir. 1995); accord Fleming v. Correctional Healthcare Solutions, Inc., 164 N.J. 90, 102, 751 A.2d 1035 (2000).

9 The court also observes that at the time DiCenso was deposed, the contract to acquire WRI had collapsed.

In response to the deposition testimony of Reger and DiCenso, the plaintiff cites the following deposition testimony of Matthew Middlemass, an employee of the plaintiff:

Q. What's his name?

A. That was Ken Rogers.

Q. So you talked to Mr. Rogers?

A. Kenny Rogers.

Q. Okay.

A. And he said that he's giving them what they want. He said I'm giving them as fast as they can take them, and I've been giving them the cars that they want.

Q. When you say he's giving them —

A. The cars that they —

Q. — the cars that they want —

A. The cars that they request. I understood it to mean the cars that they requested. If you tell them to bring your cars, then they'll bring in your cars.

Q. Did Mr. Rogers tell you that anybody at WRI was requesting specific cars be brought into the landfill?

A. A specific person, no.

Q. No, did Mr. Rogers tell you that somebody at WRI had requested that specific cars be brought to the landfill; specific cars, either your cars or somebody else's cars be brought to the landfill?

CT Page 19135

A. That was my understanding of what he told me.

In their Response to Plaintiff's Surreply, ¹⁰ the defendants object to Middlemass' testimony.

10 The defendants' motion for summary judgment and supporting brief were filed, by permission of the court, on December 20, 2007. The plaintiff filed its opposition memorandum on March 17, 2008. The defendants filed a reply memorandum on or about March 26, 2008. On May 13, 2008, the plaintiff filed a "Surreply in Opposition to Summary Judgment." The defendants objected to the surreply and at oral argument requested permission to file a response. The court granted that request and on or about June 30, 2008, the defendants filed their Response to Plaintiff's Surreply.

"Only evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment." Home Ins. Co. v. Aetna Life Casualty Co., 235 Conn. 185, 202-03, 663 A.2d 1001 (1995). Specifically, deposition testimony submitted to oppose a motion for summary judgment must be evidence as would be admissible under the rules of evidence. Id., 203-04.

The record does not disclose Ken Rogers' relationship to this matter. Presumably, he was an employee of CSX. Regardless of Rogers' presumed status, Middlemass' testimony is clearly inadmissible hearsay; Conn. Code Evid. §§ 8-1, 8-2; and what Middlemass "understood" as to what Rogers meant is speculative and inadmissible. Morache v. Greenberg, 116 Conn. 549, 550, 165 A. 684 (1933) ("The question asked upon cross-examination of a police officer called by the plaintiff as to what he understood from a conversation with one of the defendants was clearly inadmissible").

Second, the plaintiff cites a June 10, 2002 letter from Richard Wills to CSX in which Wills states:

It is our understanding that cars are to be cycled into WRI on a first in, first out basis, from the time the cars were received at the service yard for WRI. Recently, we have determined there have been irregularities in regard to cars being placed at WRI out of turn. Specifically, last Friday or Saturday cars from another company (cars having been received later at the service yard than some of our cars) were placed before our cars.

Again, the defendants object. The basis for Wills' determination that cars were being placed at WRI out of turn is not disclosed and does not appear to be based on personal knowledge, as required by Practice Book § 17-46. The court assumes that if it were based on personal knowledge, it would have been supplemented by a clarifying affidavit stating "that the affiant is competent to testify to the matters stated therein." Practice Book § 17-46. Therefore, the above quoted statement is inadmissible either as hearsay or lay opinion. See Conn. Code Evid. § 7-1 ("If a witness is not testifying as an expert, the witness may not testify in the form of an opinion, unless the opinion is rationally based on the perception of the witness and is helpful to a clear understanding of the testimony of the witness or the determination of a fact in issue"); Worden v. Gore-Meenan Co., 83 Conn. 642, 650, 78 A. 422 (1910) ("If . . . what the witness called knowledge was what he had learned from hearsay, it was not proper evidence").

The plaintiff cites a letter from WRI's attorney to the plaintiff's attorney dated June 24, 2002 which states in relevant part:

We attempted to settle our disputes. Warren Recycling claimed non-payment. Waste Conversion Technologies, Inc., claimed non-performance. In an effort to follow through with the resolution we discussed Friday evening, Warren Recycling hired more equipment and incurred additional expenses in order to fast track Waste Conversion Technologies' rail cars. Six (6) cars were delivered Monday and all six (6) were unloaded. We anticipated having the bulk of all the cars done this week and the remainder no later than next week.

The defendants argue that "there is absolutely no foundation" for the statements by WRI's attorney. The court disagrees. It is elementary that generally a person may testify as to what he did and why he did it. Fox v. Shanley, 94 Conn. 350, 362, 109 A. 249 (1920); Nelson v. Branford Lighting Water Co., 75 Conn. 548, 553, 54 A. 303 (1903); Allen v. Hartford Life Ins. Co., 72 Conn. 693, 697, 45 A. 955 (1900). Here, the person is a corporation, WRI. A corporation is a distinct legal entity that can only act through its agents. Ceci v. National Indemnity Co., 225 Conn. 165, 171, 622 A.2d 545 (1993). "It is well settled that an agent of a corporation may testify as to transactions of the corporation within the scope of the business with which he is interested, it matters not that such testimony is adverse to the corporation by which he is employed." Alexander v. Seaboard AirLine R. Co., 221 S.C. 477, 484-85, 71 S.E.2d 299 (1952); Financeamerica Private Brands, Inc. v. Haney Hall, Inc., 366 A.2d 836, 837 (Del.Super. 1976). "A lawyer is clearly an agent authorized to speak on behalf of his or her principal." C. Tait, Connecticut Evidence (3rd Ed. 2001) § 8.16.7, p. 605.

The plaintiff argues that the letter from WRI's attorney proves that WRI had the ability to take railcars out of order. The defendants argue that "WRI's counsel speaks of fast tracking plaintiff's railcars not by WRI controlling the delivery of the railcars by CSX" but, rather, in WRI's own yard. To "fast track" means to speed up, to expedite. See United States v. Gomez-Herrera, 523 F.3d 554, 560 (5th Cir. 2008) (expedited); United States v. Lasaro, Docket No. 06-2648-cr (2d Cir. December 11, 2007); Bi-County Development of Clinton, Inc. v. Borough of High Bridge, 174 N.J. 301, 324, 805 A.2d 433 (2002); Looney v. Superior Court, 16 Cal.App. 4th 521, 535 n. 17, 20 Cal.Rptr.2d 182 (1993), review denied, (Cal. September 2, 1993). A letter must be read as a whole; Zullo v. Smith, 179 Conn. 596, 604, 427 A.2d 409 (1980); Sawabini v. Desenberg, 143 Mich.App. 373, 380, 372 N.W.2d 559 (1985); Glassman v. Metropolitan Life Ins. Co., 616 F.Sup. 145, 147 (N.D.Ill. 1985); Morrissette v. Cowette, 122 N.H. 731, 734, 449 A.2d 1221 (1982); "not by singling out two words." Turner v. Devlin, 174 Ariz. 201, 208, 848 P.2d 286 (1993). At best, the letter from WRI's attorney is evidence that in late June 2002, WRI was able to expedite railcars once they arrived at the landfill. It is not evidence that WRI could do so before those cars arrived at WRI's landfill nor evidence that it could give preferential treatment nor evidence that it ever gave preferential treatment to Midstate's railcars.

11 ¹¹ The letter also is evidence, albeit not conclusive, that the delay in moving the plaintiff's railcars was caused by the insufficiency of WRI's equipment.

The plaintiff cites a handwritten letter, dated January 13, 2003, from Reger to Bill Frank Trucking during the former's negotiations to acquire the latter. In the letter, Reger states:

This letter is to confirm that if for any reason I do not enter into a contract with Waste Management for the Disposal at Varick Ave. and I do not close on my acquisition with you, you or your designee shall have the right to acquire 50% ownership in the entity that will own the Warren Recycling, Inc. landfill. This entity will be Warren Hills, LLC. The cost to acquire 50% of this entity will be 50% of the cash contribution that my company has put into the acquisition and improvements at the landfill. In the event we become 50/50 owners of the landfill, the disposal rate to your company and my company will remain $850 per railcar, unless we mutually agree to change it. Cars to be unloaded at the site in the order they arrive, no party to receive preferential treatment.

The plaintiff argues that the last sentence is evidence that it was possible for WRI to give a preference in the unloading of railcars. To be permissible, an inference must be "fairly and reasonably drawn . . . without the admixture of speculation or conjecture." (Internal quotation marks omitted.) Gleba v. New Britain, 133 Conn. 85, 88, 48 A.2d 227 (1946). This inference is a bridge too far. Moreover, even assuming such an inference were permissible, it does not show that WRI, in fact, gave preferences to Midstate the previous year.

The plaintiff cites the report of its expert, Andrew Finger, a certified public accountant with a bachelor of science degree in economics from the University of Pennsylvania, Wharton School, in support of its argument that Midstate received preferential treatment from WRI. The defendants argue in their reply brief that Finger lacks qualifications because he has "no background or expertise in the transportation or delivery of rail cars by a rail carrier, such as CSX, from the carrier's service yards to landfill railroad sidings." For the most part, however, Finger simply analyzed the data and other information generated in discovery. Finger's curriculum vitae reflects that he is more than adequately qualified to perform the task with which he was charged.

In his report, Finger calculates that "the average number of days for Warren Recycling to unload a rail car of Waste Conversion during the period March 2002 through September 2002 exceeded the average number of days for Warren Recycling to unload a rail car of Midstate or Bill Frank Trucking." (Emphasis added.) Finger measures the time periods in his report from the time WRI was notified by CSX that a railcar was "constructively placed"¹² in the latter's service yard to the time WRI unloaded that railcar. Measuring the time period in this manner rather than from the time the railcar actually arrived at WRI's landfill, Finger opines that WRI breached Article VI of its contract with the plaintiff ("WRI shall unload all rail cars within seventy-two (72) hours of arrival at WRI's landfill"), resulting in the plaintiff sustaining over four million dollars in damages.

12 As discussed infra, "constructive placement" means the holding of a vehicle, generally a railcar, at a point other than the designated loading or unloading place due to the inability of the consignor or consignee to accept the vehicle after notification in writing, or as otherwise agreed to in writing, that the car is held by the railroad and that the railroad is unable to make delivery. Houston Belt Terminal R. Co. v. Connell Rice Sugar Co., 411 F.2d 1220, 1221 (5th Cir. 1969), cert. denied, 397 U.S. 908, 90 S.Ct. 905, 25 L.Ed.2d 89 (1970); National Trucking Storage Co. v. Pennsylvania R. Co., 228 F.2d 23, 25 (D.C. Cir. 1955); Consolidated Rail Corp. v. Nevins-Petrillo Warehouse Distribution Systems, Inc., 619 F.Sup. 900, 903 (S.D.N.Y. 1983); Illinois Central Gulf R. Co. v. Golden Triangle Wholesale Gas Co., 423 F.Sup. 679, 683 (N.D. Miss. 1976), aff'd, 586 F.2d 588 (5th Cir. 1978); Union Pacific R. Co. v. Bartlett Co., Grain, 393 F.Sup. 1347, 1349 (W.D.Mo. 1975).

Preliminarily, it is necessary to be mindful of the relative number of railcars that the plaintiff, Bill Frank, and Midstate each sent to WRI between March 2002, when Midstate first started sending cars, and September 2002, when the plaintiff stopped sending its cars. The following table was derived from the work product of the plaintiff's expert, Andrew Finger:

Number of railcars unloaded by WRI, by month, between 3/02 and 9/02, by shipper

3/02 4/02 5/02 6/02 7/02 8/02 9/02

Bill Frank 197 242 231 258 292 284 245

Plaintiff 75 95 92 68 53 44 32

Midstate 8 26 27 55 72 56 44

Total 280 363 350 381 417 384 321

The following table is Finger's analysis of the average number of days it took WRI to unload the rail cars of Bill Frank, the plaintiff and Midstate. It is extracted from Exhibit V of the Finger report.

Average days for WRI to unload railcars, by month, between 3/02 and 9/02, by shipper

3/02 4/02 5/02 6/02 7/02 8/02 9/02 Total Avg

Bill Frank 11.02 9.09 8.41 12.02 6.95 6.19 7.70 8.05

Plaintiff 8.80 10.37 11.74 12.86 9.69 6.55 9.97 10.29

Midstate 5.38 8.77 9.30 13.21 6.49 7.94 9.16 8.88

Thus, over the relevant seven-month period from March to September 2002, when all three companies were sending rail cars to WRI, it took, on average, 1.5 days longer for WRI to unload a car from the plaintiff as it did a car from Midstate. It is important to be mindful, however, that the purpose of averaging is to eliminate peaks and valleys. Soo Line R. Co. v. Dept. of Revenue, 89 Wis.2d 331, 366, 278 N.W.2d 487 (Wis.Ct.App. 1979), aff'd, 97 Wis.2d 56, 292 N.W.2d 869 (1980). Averaging the seven months masks an important fact. Within the narrow seven-month time period, the average time it took to unload the plaintiff's cars in the month of June and, especially, in August 2002, was less than the time it took to unload Midstate's cars. Indeed, according to the Finger report, it took WRI longer to unload Midstate's rail cars in June 2002 — an average of 13.21 days per car — than it did for WRI to unload any other shipper's cars for any month during the seven-month period. Also, as Finger points out in Exhibit 11a to his report, the average days per round trip per railcar actually went down for the plaintiff from 14, between January and March 2002, to 12, between April and June.

"Although circumstantial evidence may be sufficient to raise a genuine issue of material fact, what is required is more substantial than a mere `scintilla of evidence' raising `some metaphysical doubt as to material facts.' [ Anderson v. Liberty Lobby, 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)]; [ Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)]. Plaintiff's evidence does not meet this standard." Johnson v. Hornung, 358 F.Sup.2d 910, 916 (S.D.Cal. 2005). "[C]ircumstantial evidence cannot create a genuine issue of material fact if a key inference is left to conjecture and speculation." Group Health Plan, Inc. v. Philip Morris, Inc., 188 F.Sup.2d 1122, 1130 (D.Minn. 2002), aff'd, 344 F.3d 753 (8th Cir. 2003). The plaintiff has failed to adduce evidence, direct or circumstantial, that there is a genuine issue of material fact that the defendants either requested or received preferential treatment from WRI.

13 ¹³ This is not to suggest that WRI never asked CSX to move a particular customer's cars. There is evidence that, as matters deteriorated during 2002 and customers complained to WRI, WRI appealed to CSX. What is lacking is any evidence that the defendants requested or received the preferential treatment that the plaintiff claims was systemic during the period.

C

The defendants claim that WRI performed its contract with the plaintiff and that the plaintiff never suffered a loss as alleged in the plaintiff's complaint.

"Unlike other torts in which liability gives rise to nominal damages even in the absence of proof of actual loss . . . it is an essential element of the tort of unlawful interference with business relations that the plaintiff suffers actual loss." (Internal quotation marks omitted.) Appleton v. Board of Education, 254 Conn. 205, 213, 757 A.2d 1059 (2000) (discussing elements of tort of tortious interference with contractual relations). "[P]roof that some damage has been sustained is necessary to [support a cause of action for tortious interference]." (Internal quotation marks omitted.) Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 33-34, 761 A.2d 1268 (2000). "[T]he tort is not complete unless there has been actual damage suffered." (Internal quotation marks omitted.) Appleton v. Board of Education, supra, 254 Conn. 213.

Finger does not opine, nor is there other evidence, that the plaintiff sustained any damages as a result of WRI's breach of Article IV of its agreement with the plaintiff. Rather, the plaintiff's claim, and Finger's opinion as to damages, is based on WRI's breach of Article VI of that agreement, in which WRI agreed to "unload all rail cars within seventy-two (72) hours of arrival at WRI's landfill." DiCenso, however, testified in his deposition that WRI complied with that requirement. To rebut this, Finger advances an analysis that shows that WRI regularly took longer than seventy-two hours to unload the plaintiff's railcars from the time of their arrival, not at WRI's landfill but from the time WRI was notified of the car's arrival at CSX's service area. Thus, the plaintiff's claim of damages rests on its argument that the seventy-hours starts to run from the time the railcars were "constructively placed" at WRI's landfill.

In the law of rail carriers, "constructive placement" is a term of art that has been in use since at least the early twentieth century. See Davis v. Greensboro Warehouse Storage Co., 186 N.C. 676, 678, 120 .SE. 462 (1923), cert. denied, 264 U.S. 594, 44 S.Ct. 453, 68 L.Ed 866 (1924). "Constructive placement" means the holding of a vehicle, generally a rail car, at a point other than the designated loading or unloading place due to the inability of the consignor or consignee to accept the vehicle after notification in writing, or as otherwise agreed to in writing, that the car is held by the railroad and that the railroad is unable to make delivery. Houston Belt Terminal R. Co. v. Connell Rice Sugar Co., 411 F.2d 1220, 1221 (5th Cir. 1969), cert. denied, 397 U.S. 908, 90 S.Ct. 905, 25 L.Ed.2d 89 (1970); National Trucking Storage Co. v. Pennsylvania R. Co., 228 F.2d 23, 25 (D.C. Cir. 1955); Consolidated Rail Corp. v. Nevins-Petrillo Warehouse Distribution Systems, Inc., 619 F.Sup. 900, 903 (S.D.N.Y. 1983); Illinois Central Gulf R. Co. v. Golden Triangle Wholesale Gas Co., 423 F.Sup. 679, 683 (N.D.Miss. 1976), aff'd, 586 F.2d 588 (5th Cir. 1978); Chicago Northwestern Railway Co. v. Union Packing Co., 326 F.Sup. 1304, 1307 (D.Neb. 1971); Betsy Ross Foods, Inc. v. Akron, Canton Youngstown Railway Co., 13 OhioApp.3d 145, 146, 468 N.E.2d 338 (1983); Chicago Northwestern Railway Co. v. Afram Brothers Co., 68 Wis.2d 311, 312-13, 228 N.W.2d 360 (1975). "Constructive placement," therefore, is a legal fiction. Chicago Northwestern Railway Co. v. Afram Brothers Co., supra, 68 Wis.2d 314. "Actual placement" means "the placing of the vehicle at the place designated by the consignor or consignee for loading or unloading." Chicago Northwestern Railway Co. v. Union Packing Co., supra, 326 F.Sup. 1307; see also Baker v. Budd Co., 91 Ill.App.3d 1007, 1010, 415 N.E.2d 592 (1980); Indiana Harbor Belt R. Co. v. Budd Co., 87 Ill.App.3d 91, 95, 408 N.E.2d 944 (1980).

After a period of "free time," the actual or constructive placement of a railcar triggers demurrage charges. Pacific Portland Cement Co. v. Western Pacific R. Co., 184 F.2d 34, 37-38 (9th Cir. 1950), cert. denied, 340 U.S. 906, 71 S.Ct. 282, 95 L.Ed. 655; Union Pacific R. Co. v. Bartlett Co., Grain, 393 F.Sup. 1347, 1349 (W.D.Mo. 1975); Chicago Northwestern Railway Co. v. Union Packing Co., supra, 326 F.Sup. 1306; Indiana Harbor Belt R. Co. v. Budd Co., supra, 87 Ill.App.3d 94-95; Chesapeake Ohio Railway v. Wiener, 336 Mich. 548, 551, 58 N.W.2d 918 (1953); 48 C.F.R. § 242.1470 (a) ("Carrier demurrage rules usually allow for a `free time' for loading or unloading cars or for any other purpose, and impose charges for cars held beyond this period"). "Demurrage, in the context of railroads, is defined as `a charge exacted by a carrier from a shipper or consignee on account of a failure on the latter's part to load or unload cars within the specified time prescribed by the applicable tariffs; the purpose of the charge is to expedite the loading and the unloading of cars, thus facilitating the flow of commerce, which is in the public interest. Demurrage is extended freight and is the amount payable for delays by receiver loading or unloading cargo; it is stipulated damages for detention.' Black's Law Dictionary 432 (6th Ed. 1990)." CSX Transportation Co. v. Novolog Bucks County, United States District Court, Docket No. 04-4018 (E.D.Pa. May 24, 2006). The practice of demurrage was developed at common law but has long been mandated by statute and regulation. Krauss Bros. Lumber Co. v. Mellon, 30 F.2d 901, 902 (5th Cir. 1929), cert. denied, 279 U.S. 872, 49 S.Ct. 513, 79 L.Ed. 1008 (1929); Prince Mfg. Co. v. United States, 437 F.Sup. 1041, 1044 (E.D.Pa. 1977); see Chrysler Corp. v. New York Central Railroad, 234 I.C.C. 755, 759-61 (1939), on the history of railroad demurrage.

In 2002, as now, 49 U.S.C. § 10746 provided: "A rail carrier providing transportation subject to the jurisdiction of the [U.S. Surface Transportation] Board under this part shall compute demurrage charges, and establish rules related to those charges, in a way that fulfills the national needs related to — (1) freight car use and distribution; and (2) maintenance of an adequate supply of freight cars to be available for transportation of property." Moreover, demurrage cannot be waived by the carrier. See Annot., "Provisions of Interstate Freight Contracts or Published Tariff's Regarding Demurrage as Subject of Waiver or Estoppel," 6 A.L.R.2d 878 (1949). "[T]he carrier is under a duty to collect and the shipper or consignee is under a duty to pay the same. They have no choice in the matter, and it is not a legitimate subject for compromise or settlement between them." (Internal quotation marks omitted.) CSX Transportation Co. v. Novolog Bucks County, supra.

In 2002, the plaintiff loaded its railcars with CD at its transfer station in Milford and CSX transported those railcars to WRI in Warren, Ohio. In 1999, when the plaintiff entered into its contract with WRI, CSX delivered the railcars directly to the landfill via a "rail siding."¹⁴ CSX would then retrieve the empty railcars and return them to the plaintiff. The plaintiff further claims that sometime after 1999, and during 2002, the railcars sent by WRI's customers, including the plaintiff, were delivered by CSX to Deforest Junction, one of CSX's service yards.¹⁵ Deforest Junction also serviced other end users in addition to WRI. When railcars destined for WRI arrived at Deforest Junction, CSX would notify WRI in writing of their arrival. Representatives of CSX and WRI would speak to each other at least once a day, in the morning, and WRI would advise CSX how many railcars it was able to accommodate. CSX would then deliver that number of railcars to WRI via its side rail and retrieve them when they were emptied.

14 The defendants dispute this fact in their response to the plaintiff's surreply brief and submitted documents in support of their position. On summary judgment, however, the court must view the facts in a light most favorable to the non-movant. Ramirez v. Health Net of the Northeast, Inc., supra, 285 Conn. 11.

15 CSX may have used other service yards in addition to DeForest Junction.

As observed supra, Article VI of the contract between the plaintiff and WRI provided in pertinent part: "WRI shall unload all railcars within seventy-two (72) hours of arrival at WRI's landfill." The defendants argue, and DiCenso testified, that WRI complied with this requirement, that once the plaintiff's railcars arrived at WRI's landfill, they were unloaded within seventy-two hours.

The plaintiff's response, contained in its surreply brief, is as follows. In 1999, at the time the plaintiff and WRI entered into their contract, railcars were not constructively placed at a CSX service yard but were brought directly to WRI's landfill. Subsequently, however, as the plaintiff's business grew, railcars were constructively placed at a service yard. According to the plaintiff, "[t]his changed the assumption of direct delivery that the parties had when they entered into the contract, and this change of circumstances as to how WRI serviced [the plaintiff's] railcars . . . renders Article VI meaningless."

Thus, according to the plaintiff, "the circumstances surrounding the Contract changed and the assumptions of WRI and [the plaintiff] in entering the Contract were thereby nullified, to [the plaintiff's] detriment. It is this change in circumstances as to how WRI serviced [the plaintiff's] railcars which renders Article VI, under Defendants' theory, meaningless. To define the terms of Article VI in the manner which Defendants insist, that is to define `arrive' as physical arrival at WRI's landfill even though the rail cars had arrived and were already constructively placed at the nearby CSX rail yard used to service WRI, and were available for unloading, would result in manifest absurdity . . .

"The meaning of the term `arrival' is unclear and ambiguous in light of the circumstances. The court must determine whether arrival means (1) physically at the WRI landfill; or (2) present at the CSX rail yard and available to the WRI landfill for unloading. At the time the Contract was entered into, the meaning of the words in Article VI may have [had] the meaning Defendants insist upon now because at that time, since the railcars were delivered directly to WRI, that was the only possible interpretation of those words . . . Since WRI changed the manner in which it conducted its business in that the [plaintiff's] cars were no longer shipped directly to WRI as contemplated by the parties at the time of entering the Contract, to give meaning to the language of Article VI, as Defendants seek, would render the Contract utterly meaningless and an absurdity would result."

In support of its argument, the plaintiff cites Kelly v. Medical Life Ins. Co., 31 Ohio St.3d 130, 509 N.E.2d 411 (1987), and Scartz v. Scartz, Nos. 88AP-724, 88AP-748, 1989 WL 43255 (Ohio App. April 15, 1989).

In Kelly v. Medical Life Ins. Co., supra, 31 Ohio St.3d 130, the plaintiffs, children of a divorced couple, sued the defendant life insurance company for proceeds of a life insurance policy insuring the life of their father. The parents' settlement agreement, incorporated into the divorce decree, required the father to "name the minor children as beneficiaries on all life insurance he has through his place of employment and Veterans Administration so long as his support obligation exists." Id., 132. After the father died, it was learned that he had not complied with the life insurance clause, but instead had named his brother, Joseph, on a life insurance policy that he acquired through his employment. The plaintiffs brought an action to be declared the rightful beneficiaries of the policy and sought an order enjoining the insurance company from disbursing any monies to Joseph. The trial court granted summary judgment for the plaintiffs. The court of appeals affirmed in part but reversed insofar as it found that there was an issue of fact as to whether the plaintiffs were entitled to all of the insurance proceeds or just enough to discharge the father's remaining child support obligation.

The Supreme Court of Ohio reversed the court of appeals. Id., 133. It acknowledged that "a court will resort to extrinsic evidence in its effort to give effect to the parties' intentions only where the language is unclear or ambiguous or where the circumstances surrounding the agreement invest the language of the contract with a special meaning." (Emphasis added.) Id., 132. The court held that the clause in question "expresses the intent of the parties in clear and intelligible language" because it "does not limit the amount of life insurance proceeds to which appellants would be entitled" but rather "limits only the period of time during which they are entitled to be named beneficiaries." (Emphasis in original.) Id. The court further held that there was "no evidence in the record of special circumstances surrounding the agreement which might justify a different interpretation." (Emphasis added.) Id. Kelly thus makes clear that the circumstances to which the court may look to determine whether extrinsic evidence is admissible are those "surrounding the agreement," not circumstances arising subsequent thereto.

In Scartz v. Scartz, supra, 1989 WL 43255, the parties divorced and, in accordance with their separation agreement, the defendant's alimony and child support obligation was based on his net income which was specifically defined by the agreement as "gross income minus proper payroll taxes." At the time of the dissolution, the defendant was a salesperson, and he was paid a salary that was based on commissions, plus all his expenses. Subsequently, he became an independent contractor with a brokerage firm and eventually became a licensed broker. At the time the defendant signed the separation agreement, he had passed the real estate examination but had not sold any real estate. The trial court found the defendant in contempt for failing to pay the proper amount of alimony and support. He appealed claiming that the trial court had erred in excluding parol evidence to explain the meaning of the term "proper payroll taxes."

The Ohio Court of Appeals agreed: "Presumably, the phase [`proper payroll taxes'] refers to the payroll deductions which existed at the time of the signing of the separation agreement. The phrase `proper payroll taxes,' although not necessarily ambiguous when viewed in the context of defendant's prior employment, has become ambiguous in the context of changed circumstances. It is incumbent upon the trial court to determine how to apply those words to clarify the ambiguity which is created by the change of circumstances and, in order to do so, a trial court must look at the assumptions upon which the original words were based and determine specifically what `gross income' means within the context of these changed circumstances. Parol evidence and extrinsic evidence is generally admissible to show what assumptions were a part of the agreement. In this case, probable assumptions were that defendant would continue to be salaried and that those payroll deductions made at the time of the signing of the agreement were `proper.'"

"In light of the fact that the terms of the separation agreement were ambiguous, within the circumstances created by defendant's change in employment, the intent of the parties was not clear, and the assumptions as to what were `proper' deductions need to be clarified. It was error for the trial court to exclude parol evidence in the form of the testimony of each party and a letter from plaintiff's attorney to defendant's attorney, which stated that plaintiff's attorney assumed that proper payroll deductions meant withholding taxes." Scartz v. Scartz, supra.

This court finds Scartz, and the rule it applies, inapposite to the facts here. In Scartz, the mathematical designation "proper payroll deductions" could not be applied because of the defendant's change in circumstances from employee to non-employee status; he no longer had payroll deductions.¹⁶ Here, however, there is nothing so elusive about a railcar's "arrival at WRI's landfill."

16 Payroll taxes are paid only by employers and employees. See 26 U.S.C. §§ 3301, 3111, 3306, 34401, 3402. "The Internal Revenue Code imposes two forms of employment tax obligations on an employer (hereinafter `payroll taxes'). First, the employer is required to pay unemployment taxes, see 26 U.S.C. § 3301, and to make contributions to its employees' social-security and Medicare benefits pursuant to the Federal Insurance Contributions Act (`FICA'), see [26 U.S.C.] § 3111. Second, the employer is required to withhold from employee compensation and remit to the government (a) employee income taxes, see [26 U.S.C.] § 3402, and (b) the employees' own mandated FICA contributions, see [26 U.S.C.] §§ 3101, 3102(b)." McNamee v. Dept. of the Treasury, 488 F.3d 100, 103 (2d Cir. 2007).

Under Ohio law, "[w]hen the language of a written contract is clear, a court may look no further than the writing itself to find the intent of the parties. As a matter of law, a contract is unambiguous if it can be given a definite legal meaning." (Internal quotation marks omitted.) Blair v. Cincinnati Ins. Co., 163 Ohio App.3d 81, 85, 836 N.E.2d 607 (2005). Article VI of the contract between the plaintiff and WRI is clear and unambiguous. Under that provision, WRI was required to unload the plaintiff's railcars "within seventy-two (72) hours of arrival at the landfill." That landfill was in Warren, Ohio, not at Deforest Junction several miles away. The uncontroverted evidence is that WRI complied with that requirement. It did not breach its contract with the plaintiff.

Even assuming that circumstances changed after 1999 in that, in 2002, the plaintiff's railcars were taken by CSX to its service yard before being taken to WRI's landfill, those railcars still arrived at WRI's landfill, and the time of their arrival at the landfill was as ascertainable in 2002 as it was when the parties entered into their contract in 1999. When an event occurs that the parties to a contract have failed to address in their agreement, "[i]t is not the responsibility or function of [the] court to rewrite the parties' contract to provide for such circumstances. Where a contract is plain and unambiguous . . . it does not become ambiguous by reason of the fact that in its operation it may work a hardship upon one of the parties." Aultman Hospital Assn. v. Community Mutual Ins. Co., 46 Ohio St.3d 51, 54-55, 544 N.E.2d 920 (1989). "Where the parties, following negotiations, make mutual promises which thereafter are integrated into an unambiguous written contract, duly signed by them, courts will give effect to the parties' expressed intentions . . . Intentions not expressed in the writing are deemed to have no existence and may not be shown by parole evidence." (Citations omitted.) Id., 53.

The plaintiff also argues that to define "arrival at WRI's landfill" in Article VI as physical arrival at the landfill would result in "manifest absurdity" since, it suggests that, if WRI did not want to take the plaintiff's railcars, or was unable to do so, it could have left them CSX's service yard indefinitely and never unloaded them. The plaintiff does not press this argument very far and the court confesses its inability to fully comprehend it. The rule in Ohio is that "[c]ommon words appearing in a written instrument will be given their ordinary meaning unless manifest absurdity results, or unless some other meaning is clearly evidenced from the face or overall contents of the instrument." Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 245-46, 374 N.E.2d 146 (1978). Here, it is the plaintiff's suggested interpretation of Article VI that is absurd. If WRI was unwilling or unable to take the plaintiff's railcars out of CSX's service yard, it would not get paid by the plaintiff and would almost certainly incur demurrage charges from CSX, charges that CSX could not waive even if it wanted to. See CSX Transportation Co. v. Novalog Bucks, 502 F.3d 247 (3d Cir. 2007), cert. denied, 128 S.Ct. 1240, 170 L.Ed.2d 65 (2008); New Orleans v. Southern Scrap Material Co., 491 F.Sup. 46, 49-50 (E.D.La. 1980), appeal dismissed, 704 F.2d 755 (5th Cir. 1983).

CT Page 19147

D

Finally, the plaintiff also argues that the defendants tortiously interfered with its contract simply by contracting with WRI for the unloading of CD with knowledge that the plaintiff had a contract with WRI that prohibited WRI from entering "into a similar agreement with any other CD transfer station within a 50 mile radius of [the plaintiff] during the term of th[e] agreement." The plaintiff argues that it is obvious that the 850 cars that Midstate sent to WRI between March and September 2002 slowed down WRI's unloading of the plaintiff's cars. In the words of the plaintiff's attorney at oral argument: "[E]ach Midstate car that was unloaded in violation of the Waste Conversion contract is a preference because that car shouldn't have been there from the beginning." The defendants disagree. Neither side has presented the court with relevant case law on the issue of whether Midstate's contracting with the plaintiff with knowledge of the fifty-mile radius prohibition in and of itself constitutes tortious interference with the plaintiff's contract.

As noted earlier, Connecticut appellate courts have adopted § 766 of the Restatement (Second) of Torts. See, e.g., Daley v. Aetna Life Casualty Co., supra, 249 Conn. 806. Section 766 states: "One who intentionally and improperly interferes with the performance of a contract . . . between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract." 4 Restatement (Second), supra, § 766. Section 767 of the Restatement (Second), supra, sets out seven factors to be considered in determining whether an actor's conduct is improper.¹⁷ However, comment (n) to § 766 contains a bright-line rule: "One does not induce another to commit a breach of contract with a third person under the rule stated in this Section when he merely enters into an agreement with the other with knowledge that the other cannot perform both it and his contract with the third person." 4 Restatement (Second), supra, § 766, comment (n).

17 4 Restatement (Second), Torts § 767 (1979) provides: "In determining whether an actor's conduct in intentionally interfering with a contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors: (a) the nature of the actor's conduct, (b) the actor's motive, (c) the interests of the other with which the actor's conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor's conduct to the interference and (g) the relations between the parties."

"A necessary element of the plaintiff's cause of action is a showing that the defendant took an active part in persuading a party to a contract to breach it. State Enterprises, Inc. v. Southridge Cooperative Section 1, Inc., 18 A.D.2d 226, 238 N.Y.S.2d 724 (App.Div. 1963). Merely entering into a contract with a party with the knowledge of that party's contractual obligations to someone else is not the same as inducing a breach. P.P.X Enterprises, Inc. v. Catala, 17 A.D.2d 808, 232 N.Y.S.2d 959 (App.Div. 1962). It is necessary that there be some act of interference or of persuading a party to breach, for example by offering better terms or other incentives, for tort liability to arise." Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768, 803 (Tex.App. 1987) (applying New York law), cert. dismissed, 485 U.S. 994, 108 S.Ct. 1305, 99 L.Ed.2d 686 (1988); see John Paul Mitchell Systems v. Randalls Food Markets, Inc., 17 S.W.3d 721, 731 (Tex.App. 2000) (adopting the rule as a matter of Texas law), cert. denied, (Tex. February 8, 2001); Ocean State Physicians Health Plan, Inc. v. Blue Cross Blue Shield of Rhode Island, 883 F.2d 1101, 1113 (1st Cir. 1989) ("Conduct in furtherance of business competition is generally held to justify interference with others' contracts, so long as the conduct involves neither `wrongful means' nor `unlawful restraint of trade.'"), cert. denied, 494 U.S. 1027, 110 S.Ct. 1473, 108 L.Ed.2d 610 (1990). As the court stated in W. Oliver Tripp Co. v. American Hoechst Corp., 34 Mass.App.Ct. 744, 751-52, 616 N.E.2d 118 (1993): "It was insufficient for [the plaintiff] to show merely that (1) it had business relationships with third parties, (2) about which [defendant] knew, (3) and with which [the defendant] intentionally interfered, and (4) that it suffered damage in consequence of the interference. [The plaintiff] needed to offer evidence that the third factor in establishing the tort, intentional interference, was induced by an improper motive or executed by improper means."

In Middleton v. Wallichs Music Entertainment Co., 24 Ariz.App. 180, 181, 536 P.2d 1072 (1975), the tenant had a lease which provided: "Lessor hereby covenants and agrees that it will not enter into a lease with any tenant if the tenant is primarily engaged in a television, radio and high-fidelity sales and service business." When sued by the lessor for rent, the tenant counterclaimed and sued Wallichs Music City for tortious interference alleging that Wallichs had entered into a lease with the lessor in violation of the lessor's covenant with the tenant. The trial court directed a verdict against the tenant and the tenant appealed. Citing to what is now contained in comment (n) to § 766 of the Restatement (Second) of Torts, the Arizona Court of Appeals held that to be liable, Wallichs had to have induced the breach of contract by improper means: "The mere fact that Wallichs Music City contracted with the lessor with knowledge of the existence of the restrictive covenant and its possible breach by lessor in entering into the subsequent lease with Wallichs, is not, according to the better view, the equivalent of improper inducement." Middleton v. Wallichs Music Entertainment Co., supra, 24 Ariz.App. 183. For there to be tortious interference, a defendant's solicitation of the breach would have to have "proceed[ed] beyond the normal and regular course of [its] business solicitations," such as "offer[ing] a special price as consideration for the express purpose of inducing a breach . . ." Id., 184.

Our Supreme and Appellate Courts have not specifically adopted the language of comment (n), and "[c]oncededly, the Court in Vitanza v. Upjohn Co., 257 Conn. 365, 376, 778 A.2d 829 (2001), suggested that the adoption of a Restatement section is not necessarily adoption of comments thereto." Goldstein v. Unilever, Superior Court, judicial district of Fairfield, Docket No. CV 02 0397881 (May 3, 2004, Levin, J.) (37 Conn. L. Rptr. 158, 164 n. 4). Nonetheless, it would be imprudent for a trial court not to follow a Restatement comment where the Supreme Court has adopted the Restatement section, absent grounds to believe that the comment is inconsistent with Connecticut law. Moreover, comment (n) finds support in Connecticut case law, in Robert S. Weiss Associates, Inc. v. Wiederlight, 208 Conn. 525, 546 A.2d 216 (1988).

In Wiederlight, the defendant was employed by the plaintiff to sell commercial insurance. His employment contract barred him "for two years from the date the agreement terminated, from soliciting accounts held by the plaintiff at the time the employment agreement terminated, and from working within Stamford and within ten miles from the outer borders of Stamford." Id., 528. Immediately after the plaintiff failed to renew his contract, "Wiederlight was hired by IAC . . . and began to solicit and sell commercial insurance policies to customers he had dealt with while working for Weiss. Before hiring Wiederlight, the principals of IAC had reviewed his employment agreement with Weiss and were aware of the terms of the restrictive covenant." Id.

"During his employment at IAC from April 1983, to March 1985, Wiederlight sold insurance to a number of accounts that belonged to the plaintiff when Wiederlight's employment there ceased. Wiederlight also sold commercial insurance to other customers within the restricted Stamford area. The commissions generated by Wiederlight during his employment at IAC inured to the financial benefit of his employer. The principals of IAC encouraged and induced Wiederlight to sell insurance to customers of the plaintiff and others in the Stamford area despite their knowledge of the restrictive covenant in Wiederlight's 1979 employment agreement with Weiss." Id.

The plaintiff sued and recovered a judgment against IAC for tortious interference with contractual relations. IAC appealed, claiming that the plaintiff had failed to plead or prove that IAC acted wrongfully or improperly. Id., 535. The Supreme Court agreed that the plaintiff had failed to properly plead a cause of action for tortious interference with contractual relations. Although the holding of the court was on a matter of pleading, its holding is nonetheless telling as a matter of substantive law. "The plaintiff's complaint omits the necessary allegation of improper motive or means. The assertion that IAC `encouraged' Wiederlight to sell commercial insurance in the restricted area when it knew or should have known of the covenant's terms does not fairly imply that IAC acted with `fraud, misrepresentation, intimidation or molestation' or that it acted with malice. Blake v. Levy, supra, [191 Conn.] 261. Construing the allegations most favorably to the pleader . . . the most the complaint alleges is that IAC knew of the covenant's terms when it hired Wiederlight." (Citation omitted.) Id., 536-37.

18 ¹⁸ To the extent that Wiederlight holds that a judgment after a trial on the merits may be set aside because of a non-prejudicial pleading deficiency, it has been overruled by Tedesco v. Stamford, 215 Conn. 450, 459, 576 A.2d 1273 (1990). See also Landry v. Spitz, 102 Conn.App. 34, 41-46, 925 A.2d 334 (2007).

The plaintiff has submitted the testimony of DiCenso, Reger and Orient, the three persons present at the mid-March 2002 meeting in Hartford/Windsor Locks preceding the execution of the WRI-Midstate contract later that month. Although there is a genuine issue of material fact as to whether the defendants knew of plaintiff's contract with WRI and its terms, the evidence shows that the dealings between the parties at this meeting was arms length. The meeting was held at DiCenso's request, the participants haggled over price, and Midstate received a somewhat better price from WRI than the plaintiff had been given. The evidence is that the plaintiff was not even discussed at the meeting. The plaintiff has not submitted any evidence, direct or circumstantial, that the defendants induced WRI to breach its contract with the plaintiff. Therefore, the plaintiff has not established that the defendants tortiously interferred with the plaintiff's contract by having NEW enter into a contract with WRI to dispose of Midstate's CD with knowledge that in doing so WRI would be breaching its contract with the plaintiff.

In conclusion, there is no genuine issue of material fact as to whether there was a contract between the plaintiff and WRI. There is a genuine issue of material fact as to whether the defendants were familiar with the existence of that contract and its terms. There is also a genuine issue of material fact as to whether the defendants intended to interfere with the plaintiff's contract in the sense that they knew that interference with the plaintiff's contract with WRI was substantially certain to occur as a result of Midstate's contract with WRI. However, there are no genuine issues of material fact as to whether the defendants tortiously interfered with the plaintiff's contract with WRI or whether they caused the plaintiff to sustain a loss: there is not evidence that they did so. As a result, the plaintiff's allegations that the defendants tortiously interferred with the plaintiff's contract with WRI cannot survive the motion for summary judgment.

II

In the second count, the plaintiff asserts a claim for tortious interference with business relations against the defendants. The second count incorporates the allegations of the first count and further asserts that when the defendants engaged WRI to recycle and dispose of waste for Midstate, they were aware of the competitive nature of the plaintiff's business and its reliance on those business relationships with persons interested in disposing of CD material. The plaintiff alleges that the defendants were neither justified nor privileged to engage in the conduct complained of in the first count, which, it alleges, resulted in the impairment of the plaintiff's relationships with third parties. The plaintiff claims in the second count that the defendants "intended to impair or destroy plaintiff's contractual relationship with WRI, thereby dashing plaintiff's expectancy of economic gain. Defendant[s] engaged in this conduct with malice toward [the plaintiff] and a desire to injure plaintiff economically."

"The cause of action for tortious interference with business relations has long been recognized in Connecticut. Blake v. Levy, 191 Conn. 257, 260, 464 A.2d 52 (1983). Nonetheless, `not every act that disturbs a contract or business expectancy is actionable . . . [F]or a plaintiff successfully to prosecute such an action it must prove that the defendant's conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation . . . or that the defendant acted maliciously . . . [A]n action for intentional interference with business relations . . . requires the plaintiff to plead and prove at least some improper motive or improper means The plaintiff in a tortious interference claim must demonstrate malice on the part of the defendant, not in the sense of ill will, but intentional interference without justification.' . . . Daley v. Aetna Life Casualty Co., 249 Conn. 766, 805-06, 734 A.2d 112 (1999); Blake v. Levy, supra, 260-62." PAR Painting, Inc. v. Greenhorne O'Mara, Inc., 61 Conn.App. 317, 324, 763 A.2d 1078, cert. denied, 255 Conn. 951, 770 A.2d 31 (2001).

Connecticut follows the rules of the Restatement (Second) of Torts for the tort of tortious interference with business relations, including § 766. Golembeski v. Metichewan Grange No. 190, supra, 20 Conn.App. 702. For the same reasons that the court determined in part I that the defendants did not tortiously interfere with the plaintiff's contract with WRI, the court holds that the defendants did not tortiously interfere with the plaintiff's business relations.

III

The third count incorporates the allegations of the second count and alleges that the defendants' conduct violated CUTPA. The defendants argue that (1) they "are entitled to dismissal of plaintiff's CUTPA claim for the same reasons that the tortious interference claims should be dismissed"; (2) "there was nothing unfair, deceptive or offensive to public policy about defendants' conduct with respect to the March 2002 agreement allowing Midstate to ship CD waste to WRI" because "[t]he purpose of that agreement was simply to give Midstate the ability to dispose of its CD waste at WRI's landfill," and "[t]here was no nefarious purpose or intent to harm the plaintiff"; (3) the plaintiff never complained to the defendants in 2002 that Midstate was shipping waste to WRI although the plaintiff knew this by May 2002; and (4) the defendants did not direct WRI or CSX to give Midstate's railcars preferential treatment.

The plaintiff claims that a different standard of proof applies to CUTPA claims than to claims of tortious interference. In its brief, the plaintiff argues: "All of the arguments made above as to the tortious interference claims apply even more so as to the CUTPA claim. Even if at the time of trial the Court were to determine that [the plaintiff] has failed to prove its tortious interference claims, the Court may still enter judgment as to the CUTPA claim. The element of intent and tortious conduct is lacking in the CUTPA claim and it is that very element that Defendants argue in their Motion for Summary Judgment."

"[I]n determining whether a practice violates CUTPA [the Supreme Court has] adopted the criteria set out in the cigarette rule by the federal trade commission for determining when a practice is unfair: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons] . . . All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., supra, 285 Conn. 19, quoting Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 154-55, 881 A.2d 937 (2005), cert. denied, 547 U.S. 1111, 126 S.Ct. 1913, 164 L.Ed.2d 664 (2006). "[A] violation of CUTPA may be established by showing either an actual deceptive practice . . . or a practice amounting to a violation of public policy." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., supra, 285 Conn. 19. Thus, tort claims for interference with contractual relations, or for interference with business relations, and claims under CUTPA differ in the standard by which the alleged wrongful acts are measured.

"While liability in tort is imposed only if the defendant maliciously or deliberately interfered with a competitor's business expectancies, CUTPA liability is premised on a finding that the defendant engaged in unfair competition and unfair or deceptive trade practices. The Connecticut General Assembly deliberately chose not to define the scope of unfair or deceptive acts proscribed by CUTPA so that courts might develop a body of law responsive to the marketplace practices that actually generate such complaints . . . Because CUTPA is a self-avowed `remedial' measure, General Statutes § 42-110b(d), it is construed liberally in an effort to effectuate its public policy goals . . . Predictably, CUTPA has come to embrace a much broader range of business conduct than does the common law tort action." (Citations omitted.) Sportsmen's Boating Corp. v. Hensley, 192 Conn. 747, 755-56, 474 A2d 780 (1984).

"Indeed, there is no . . . unfair method of competition, or unfair [or] deceptive act or practice that cannot be reached [under CUTPA] . . . In addition to establishing a standard of conduct more flexible than traditional common law claims, the expansive language of CUTPA prohibits unfair or deceptive trade practices without requiring proof of intent to deceive, to defraud or to mislead. See, e.g., Web Press Services Corp. v. New London Motors, Inc., 203 Conn. 342, 362-63, 525 A.2d 57 (1987) (common law claims for fraud, deceit and misrepresentation require proof that defendant knew of falsity of representation, whereas CUTPA claimant need not prove defendant's knowledge that representation was false); Sportsmen's Boating Corp. v. Hensley, supra, 192 Conn. 754-57 (unlike tort claim for interference with business expectancies, which requires proof of malicious or deliberate interference with competitor's business expectations, CUTPA liability may be based solely on proof of unfair or deceptive acts) . . ." (Citations omitted; internal quotation marks omitted.) Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 230 Conn. 148, 158, 645 A.2d 505 (1994). Therefore, "[a] trial court must guard against considering business tort claims and CUTPA claims in the same light. Conduct that might be actionable under CUTPA may not rise to a level sufficient to invoke tort liability." Sportsmen's Boating Corp. v. Hensley, supra, 192 Conn. 756.

Factually, the court has determined that the defendants have sustained their burden of proof that they never requested nor received preferential treatment in service from WRI and that WRI did not breach the seventy-two hour provision in its contract with the plaintiff. However, the plaintiff reasserts its argument, under the guise of CUTPA, that the defendants interfered with their contract simply by contracting with WRI for the unloading of CD with knowledge that the plaintiff had a contract with WRI that prohibited WRI from entering "into a similar agreement with any other CD transfer station within a 50 mile radius of [the plaintiff] during the term of th[e] agreement." Essentially, at oral argument, the plaintiff posited that the 850 cars that Midstate sent to WRI between March and September 2002 jammed up DeForest Junction and ultimately slowed down WRI's unloading of the plaintiff's cars at its landfill.

The defendants respond that there is no evidence of this scenario. Indeed, there is no evidence that the 850 railcars that Midstate sent over seven months caused the plaintiff damages, and causation is a necessary element of a CUTPA claim. Stevenson Lumber Co. v. Chase Associates, Inc., 284 Conn. 205, 932 A.2d 401 (2007); Abrabams v. Young Rubicam, Inc., 240 Conn. 300, 306, 692 A.2d 709 (1997). "It is axiomatic that causation must be removed from the realm of speculation and conjecture." Samose v. Hammer-Passero Norwalk Chiropractic Group, P.C., 24 Conn.App. 99, 103, 586 A.2d 614, cert. denied, 218 Conn. 903, 588 A.2d 1079 (1991).

Under federal summary judgment procedure as expounded by the United States Supreme Court in Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), "[w]hen the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the nonmovant's claim . . . In that event, the nonmoving party must come forward with admissible evidence sufficient to raise a genuine issue of fact for trial in order to avoid summary judgment." Jaramillo v. Weyerhaeuser Co., 536 F.3d 140, 145 (2d Cir. 2008), citing Celotex Corp. v. Catrett, supra, 477 U.S. 322-23.¹⁹ Although Connecticut's summary judgment rules were originally based on the federal rule, Celotex is not the law of Connecticut. Mishy Sportswear, Inc. v. Raptis, Superior Court, judicial district of New Haven, Docket No. 405422 (July 24, 1998, Levin, J.). Indeed, Celotex has never been cited by a Connecticut appellate court. In Connecticut, to the misfortune of some litigants and taxpayers, the party moving for summary judgment bears the burden of proving the absence of a dispute as to any material fact even where the burden as to that material fact would be on the nonmovant at trial, and even though the nonmovant is unable to adduce any evidence of that fact. See Crowley v. Dudek, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 05 4004360 (November 30, 2007, Levin, J.). Despite the extensive discovery that has been had in this action, the defendants cannot obtain summary judgment by pointing to the absence of evidence supporting the factual basis of the plaintiff's CUTPA claim.

19 Notably, Celotex has been adopted by rule or court decision in a majority of states. See Orme School v. Reeves, 166 Ariz. 301, 310, 802 P.2d 1000, 1009 (1990); Hamilton v. Allen, 100 Ark.App. 240, 246-50 (2007), cert. denied, (Ark. March 20, 2008); Aguilar v. Atlantic Richfield Co., 25 Cal. 4th 826, 24 P.3d 493, 107 Cal.Rptr.2d 841 (2001); Continental Air Lines, Inc. v. Keenan, 731 P.2d 708, 712 (Colo. 1987); Burkhart v. Davies, 602 A.2d 56, 59 (Del. 1991), cert. denied, 504 U.S. 912, 112 S.Ct. 1946, 118 L.Ed.2d 551 (1992); Claytor v. Owens-Corning Fiberglass Corp., 662 A.2d 1374, 1381 (D.C. 1995); Kelson v. Central of Georgia R. Co., 234 Ga.App. 200, 204, 505 S.E.2d 803 (1998); First Hawaiian Bank v. Weeks, 70 Haw. 392, 396-97, 772 P.2d 1187 (1989); Dunnick v. Elder, 126 Idaho 308, 312, 882 P.2d 475 (Ct.App. 1994); Hutchcraft v. Independent Mechanical Industries, 312 Ill.App.3d 351, 355, 726 N.E.2d 1171, cert. denied, 189 Ill.2d 687, 734 N.E.2d 894 (2000); Wilson v. Darr, 553 N.W.2d 579, 582 (Iowa 1996); Bacon v. Mercy Hospital of Ft. Scott, 243 Kan. 303, 756 P.2d 416 (1988); Crooks v. Greene, 12 Kan.App.2d 62, 64-65, 736 P.2d 78 (1987); Samaha v. Rau, 977 So.2d 880, 886 (La. 2008); Geisz v. Greater Baltimore Medical, 313 Md. 301, 330-31, 545 A.2d 658 (1988); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716, 575 N.E.2d 734 (1991); McCart v. J. Walter Thompson, Inc., 437 Mich. 109, 121-22 n. 12, 469 N.W.2d 284 (1991); DLH, Inc. v. Russ, 566 N.W.2d 60, 70-71 (Minn. 1997); Galloway v. Travelers Ins. Co., 515 So.2d 678, 683-84 (Miss. 1998); Cuzze v. University Community College System of Nevada, 123 Nev. 131, 134, 172 P.3d 131 (2007); Housel v. Theodoridis, 314 N.J.Super. 597, 601-02, CT Page 19159 715 A.2d 1025 (1998); Lopez v. Reddy, 137 N.M. 554, 561, 113 P.3d 377 (2005); Steinbach v. State, 2003 N.D. 46, 658 N.W.2d 355 (2003); Ertel v. Patriot-News Co., 544 Pa. 93, 101, 674 A.2d 1038, cert. denied, 519 U.S. 1008, 117 S.Ct. 512, 136 L.Ed.2d 401 (1996); Baughman v. AT T, 306 S.C. 101, 115, 410 S.E.2d 537 (1991); One Star v. Sisters of St. Francis, 2008 S.D. 55, 752 N.W.2d 668 (2008); Fitts v. Arms, 133 S.W.3d 187, 190 (Tenn.App. 2003); Poplaski v. Lamphere, 152 Vt. 251, 254-55, 565 A.2d 1326 (1989); Young v. Key Pharmaceuticals, Inc., 112 Wash.2d 216, 225, 770 P.2d 182 (1989); Williams v. Precision Coil, Inc., 194 W. Va. 52, 59-60, 459 S.E.2d 329 (1995); Transportation Ins. Co., Inc. v. Hunzinger Construction Co., 79 Wis.2d 281, 291-92, 507 N.W.2d 136 (Wis.Ct.App. 1993); Franks v. Olson, 975 P.2d 588, 593 (Wyo. 1999); contra Berner v. Caldwell, 543 So.2d 686 (Ala. 1989); Byrd v. BT Foods, Inc., 948 So.2d 921, 923-24 (Fla. 2007); Jarboe v. Landmark Community Newspapers, 644 N.E.2d 118 (Ind. 1994); Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 482 (Ky. 1991); ITT Commercial Finance v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 378-80 (Mo. 1993); Jones v. General Motors Corp., 325 Or. 404, 416-19, 939 P.2d 608 (1997); Casso v. Brand, 776 S.W.2d 551 (Tex. 1989); Williams v. Dallas, 53 S.W.3d 780, 786 (Tex.App. 2001); Orvis v. Johnson, 2008 UT 2, 177 P.3d 600, 603-04 (2008).
Celotex is also the law of Ohio. See Todd Development Co. v. Morgan, 116 Ohio St.3d 461, 466, 880 N.E.2d 88 (2008); Wing v. Anchor Media, Ltd. of Texas, 59 Ohio St.3d 108, 111, 570 N.E.2d 1095 (1991); Dumas v. Estate of Dumas, 68 Ohio St.3d 405, 408-09, 627 N.E.2d 978 (1994). Although the contract between the plaintiff and WRI provides that it is to be governed by Ohio law, Connecticut procedural law governs the rules of civil procedure; Slobodnjak v. Coyne, 116 Conn. 545, 548, 165 A. 681 (1933); such as the rules governing summary judgment.

The court concludes that the legal basis of the defendants' claim that they are entitled to summary judgment on the CUTPA count has not yet been adequately briefed. The three criteria of the cigarette test for a CUTPA claim are not empty platitudes but discrete criteria deserving of meaningful analysis. The defendants have not provided that analysis and for the court to do so without adequate briefing would be contrary to the due administration of justice.

The defendants' motion for summary judgment is granted as to counts one and two and denied as to count three.